As the heatwave in Europe continued into the quarter, we were able to improve our sales. The improvement was driven by the Nordic area, to some degree driven by tourists from southern Europe. As a result, the third quarter showed higher sales, especially in the Frilufts operation, while reported operating profit was broadly unchanged. Net sales increased to 217,7 MEUR from 206,4 MEUR, while reported operating profit was 32,1 MEUR, same as last year. The reported operating margin decreased to 14,7% from 15,5%. Last year’s Group EBIT included 1,9 MEUR of other operating income related to a fx revaluation, while this year’s Brands result includes a 0,7 MEUR cost related to Viomoda, our manufacturing unit in Bulgaria, consolidated from this quarter These items should be considered when assessing the year-on-year earnings development.
Total income for the quarter increased to 220,1 MEUR from 212,3 MEUR, despite the lower other operating income. EBITDA was unchanged at 46,9 MEUR. Financial expenses, including fx effects decreased to 2,4 MEUR from 4,7 MEUR, helping profit before tax increase to 30,0 MEUR from 27,7 MEUR. Earnings per B-share before dilution increased to 1,65 EUR from 1,50 EUR.
Our business in Germany showed some improvement despite the continuing economic uncertainty. This is encouraging, although it does not yet indicate a broad-based recovery.
Brands
For the third quarter of 2026, Brands reported external sales of 76,2 MEUR compared with 75,1 MEUR in the third quarter of 2025. Reported operating profit for the quarter was 25,2 MEUR compared with 26,4 MEUR last year. Hanwag and Devold showed positive development in sales. Almost all the division’s sales losses were attributable to the US operations, while Canada continued to stand out with strong performance. This year’s Brands result includes, as told above, a cost of 0,7 MEUR related to Viomoda.
Global Sales
Global Sales increased external sales to 41,1 MEUR from 37,0 MEUR in the same quarter last year, with operating profit increasing to 8,0 MEUR from 7,6 MEUR. Growth was mainly driven by the introduction of Devold into the Global Sales organization this year. The segment made a stronger earnings contribution to the Group in the quarter.
Our joint venture in China continued to deliver strong sales growth, primarily driven by online sales and the addition of new stores. Despite this growth, its result remained broadly
unchanged from last year, as store-opening costs were recognized as expenses rather than capitalized. The expansion therefore weighed on current earnings even as sales continued to grow. The rest of Asia, with some exception for South Korea, performed well.
Frilufts
Frilufts showed a better quarter. External sales increased by 6,5% to 100,5 MEUR from 94,4 MEUR. Operating profit increased to 4,9 MEUR from 3,9 MEUR. Higher salaries and depreciation related to IT investments limited the improvement in operating margin. The improvement in both sales and operating profit is encouraging. At country level, Globetrotter in Germany showed some improvement in sales, while the Nordic markets performed very well, especially Naturkompaniet in Sweden, which achieved a record performance in the quarter.
Going forward
The fourth quarter is, as usual, hard to predict due to factors such as the weather and Christmas shopping. We are prepared and have been able to deliver goods on time. I therefore refrain from trying to predict the outcome.
Looking further ahead, we are taking measures to improve our performance throughout the Group, with changes starting in January 2027. As Brands and Global Sales should be assessed together, given their closely linked supply and distribution activities, we will change our reporting by merging the two segments into the new Brands segment. This will not only make our reporting clearer as well as improving how we approach our markets, while retaining our local representation. This has historically been one of our success factors. At the same time, we will be better able to adapt to the changing needs of our users and retailers. We will also change the Group’s accounting methodology to function-based accounting, which will better enable us to track and control our costs. This will also mean redefining how gross profit is calculated to better reflect our own production activities, such as those at Hanwag, Viomoda and Devold. We have been, and remain, focused on cost control, as well as working to reduce the effects of market price distortions on our brands. The first measures for 2027 have already been implemented.
All the best
Martin Nordin
Chairman of the Board
